How to Read Notice of Assessment and Reply to Request for Documents

Canadians tax filing deadline has passed on April 30th, 2011. And if you are one of those who have filed their tax return on time, you have probably got back your refund or if you owed taxes, paid your tax bill by now, to avoid penalties and interest.

You also probably got a Notice of Assessment from Canada Revenue Agency, explaining, how much carry forward you have for the next tax year and what is your TFSA and RRSP contribution limits for the next tax year. NOA is a very important document for you to understand and keep in file. If you do not agree with the NOA, you must file your objection in due time. If you fail to file your objection to CRA’s NOA, by law you are obligated to abide by the NOA information and data. Get help of your Tax Advisor to understand your NOA.

If your tax return was a bit complicated and you have lots of medical, tuition expense, business loss, etc., CRA will not send you a NOA. CRA will send you a 4 to 9 page letter, requesting supporting/additional documents to support your deduction claims. This letter is usually sent from CRA’s preassessment review section.


A preassessment review is kind of a first step toward a soft audit. If you can provide all the supporting documents that CRA requested properly and in an organized manner, CRA will usually accept your deduction claims and will send you a NOA. But if you fail to provide sufficient documents to support your tax deduction claims, an Audit flag will sure go up and your tax file could be audited by a CRA auditor. The auditor will have the full authority to determine your tax bill after reviewing your supporting documents.

Some of our clients have received the “Request for Additional Documents”, in last few weeks. We were prepared for these letters, informed our clients that they might get the request when we filed their 2011 tax returns. We even prepared the documents and kept in file, waiting to send them out as soon as we get the “Request for Additional Documents” from CRA.

Here is an example of our reply to a “Request for Additional Documents” for one of our client. The document we provided to support the tax deduction claim was to the point, clear, in detail, with third party endorsements. The supporting document was about 1” thick and marked with highlighters, and post it notes, so the auditor could find the information easily. We got a reply for the client’s tax return in less than 3 weeks from Preassessment Review Section, agreeing with our deduction claims and NOA in the following week.

If the supporting documents we provided to CRA were not supporting the deduction claims in the tax return, our client could be on hook for several thousand additional taxes.

If you get a letter of “Request for Additional Documents”, do not feel nervous or fear. Also, do not contact CRA by yourself and provide any information. Consult with your Tax Advisor and seek professional advice who has experience of dealing with “Request for Additional Documents”. This could mean a savings of thousands of dollars for you, your family and/or your business.

You are responsible to pay your fair share of tax. That is the law.